Kansas City May Become Epicenter of Google's Big TV Disruption

By Erika Morphy
Feb 24, 2012 10:55 AM PT

Speculation that Google is going to disrupt yet another industry -- this time cable television -- is circulating, prompted by an
application the search engine giant filed with the Missouri Public Service Commission, seeking a franchise to provide video service in Kansas City, Mo. A similar application was filed in Kansas City, Kan.

This is not the first time that talk has arisen over Google's possible plans to offer a pay-TV service. Last year, a report surfaced in The Wall Street Journal that Google intended to distribute stations over the fiber optic network it is building in Kansas City and that it had approached Walt Disney, Time Warner and Discovery Communications to discuss bundling their channels.

Google was also planning to bundle video and phone services, according to WSJ sources.

Lips Are Zipped

Google won't say whether it is planning such a grand offering. The two applications it filed are directly related to the company's fiber project, Google spokesperson Jenna Wandres told TechNewsWorld.

"The video franchise license is a small legal step we have to take just to explore what we might want to offer," she said. "Just because we filed the applications doesn't mean we will or will not offer video services."

Looking Forward to the Big Bang

"Ha!" is the typical response of observers in this space. Google is widely believed to be entering it in some form.

"This could be the big bang that changes the TV industry as we know it," Jeff Kagan, an independent tech analyst, told TechNewsWorld.

It could be similar to the big bang Apple created in the music and smartphone industries with the launch of the iPod and iPhone, he speculated. Ditto the impact of Google's Android in the smartphone space.

Of course, the pay-TV industry has been frightened by the specter of new competition in the form of disruptive technology or service before, Kagan continued -- and successfully stared down all threats.

"We thought the entrance of satellite would lower prices and bring innovation but it didn't," he recalled. "All that really did was provide cable to customers who couldn't get service otherwise. Then we thought the telephone companies would be the big bang when they started offering TV services over IP networks."

They did take some business away from cable providers, Kagan noted -- and cable companies stopped raising prices for about a year after these services launched. However, for some reason they never took off either.

"Now the cable companies are back to raising their prices," he noted.

However, both Google and Apple have a history of transforming moribund -- or at least, mature -- industries, Kagan pointed out, "so this time might do the trick."

Bring It On

Competition has been relatively slow in coming to the multichannel video programming delivery business, observed Philip Napoli, a communication and media management professor at
Fordham University.

"Cable has received some competition from satellite -- and more recently, telephone companies -- but there are still plenty of spots in the country where households don't have much choice in terms of how to use for their video programming service," he told TechNewsWorld.

"It will be interesting to see whether Google chooses to compete in markets where all three providers -- cable, satellite, telco -- already have strong footholds," said Napoli, "or whether they focus any future offerings on markets where there is less competition."

Consumers Will Win

Whatever approach Google takes to entering the market, consumers are bound to win, said Steve Day, SVP of marketing and strategic planning with
Cheetah Technologies.

"Google's entrance into the TV market is good for the video industry, as it will influence both cable and satellite providers to innovate their platforms to compete," he told TechNewsWorld. "As we see more companies like Google making headway in the TV market, user quality of experience will absolutely become a differentiator as well as a competitive advantage in this quickly evolving industry."